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German finance minister Wolfgang Schauble said yesterday the Greek government’s optimism about clinching a cash-for-reforms deal with its lenders within days was not backed up by negotiations and he could not rule out Greece becoming insolvent.

Greek prime minister Alexis Tsipras’s leftist government hopes a deal with foreign lenders is imminent, with finance minister Yanis Varoufakis saying on Monday that an agreement could be reached within a week.

But Mr Schauble poured cold water on this idea, saying reports from the international institutions involved in negotiations with Athens suggested talks were progressing “very hesitantly”.

“What I know from discussions with the three institutions does not back up the optimism arising from announcements from Athens,” Mr Schauble said in an interview with Reuters. “There is not yet any substance to the mere announcement that we are closer to an agreement. This is still within the realms of atmosphere,” he added.

Greece’s EU and IMF lenders say talks are moving too slowly for a deal in the coming days.

Asked whether he thought Greece was coming ever closer to insolvency, Mr Schauble said the situation was in Athens’ hands, adding: “I can’t rule anything out in any case.”